Shelley Moore Capito could support TAG bill — but says it’s not moving

Rep. Shelley Moore Capito (R-W.Va.), a member of the House Financial Services Committee, predicted Tuesday that a Senate bill to extend the Transaction Account Guarantee program would fail to make its way to the House.

Asked during POLITICO Pro’s P2012 Policy and Politics Financial Services Luncheon whether she would support the bill if it reaches the lower chamber, the West Virginia lawmaker said, “We’ll see what happens in the Senate. ... I think it has served a purpose in terms of shoring up particularly our community banks.”

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Pressed on whether she would vote to extend the Federal Deposit Insurance Corporation program, Capito responded, “I could support it if it came back, but I kind of have a feeling it’s not going to make it through the cloture vote.”

Senate Majority Leader Harry Reid introduced a bill last month to extend the program, which provides a backstop for certain customer deposits. Preventing TAG from expiring at the end of the year has been a top legislative goal for community banks during the lame duck.

A procedural vote on the bill is scheduled for Tuesday afternoon. While an extension has drawn support from the Obama administration as well as key lawmakers, some Republicans — including Sens. Richard Shelby (Ala.) and Bob Corker (Tenn.) — have expressed their opposition to continuing the program.

Frank Keating, CEO and president of the American Bankers Association — a group that represents both small and big banks — warned at the luncheon that allowing TAG to expire would result in “calamity.”

“If TAG is abolished ... money will flow to too-big-to-fail banks,” Keating said. “Because a lot of people will say ‘I’m going to move to the big guys.’ That’s very unhealthy for America. What keeps communities alive are community banks.”

This article first appeared on POLITICO Pro at 1:09 p.m. on December 11, 2012.